AMERICA and OIL

AFTER all these years, I still hear or read the crackpot theory or allegation that the US government somehow has knowledge or actually perpetrated the 9/11 tragedy. Despite criticisms, I don't believe American leaders will knowingly harm their own people right at home, especially in the magnitude of the 2001 horror. I am sorry, for me, such a thinking is almost parallel to saying extra-terrestrials manipulated the last election results. I believe such wild rumination is a reflection of some people's refusal to read writings on the wall and/or simply a look at themselves (ourselves) in the mirror.

          Let's look back.

          Islamic extremism was virtually unknown fifty years ago. And yet today it seems that we are confronted with the fear that some suicide bombings or Al-Qaeda guided shootings will happen just about any given day. Too much anger and hatred. Why? Western intervention in the Middle East over the past century to secure access to the region’s oil reserves established a perfect environment in which Islamic fundamentalists could exploit growing anti-Western sentiment throughout the Islamic world. The most recent manifestation of this rage is the terrorist group known as the Islamic State (or Islamic State of Iraq and Syria, ISIS) which emerged out of the chaos caused by the US invasion of Iraq.

          Let's look at current situation/s.

          Saudi Arabia or Saudi-led OPEC's recent threat to reduce its oil production by 1.2 million barrels a day should not always be seen as gesture to wrest back control of the global oil market (depressed by persistent oversupply) from threat from Russia and several non-OPEC countries. Or maybe Iran is power-muscling its way to grab OPEC leadership, hence iron grip-handle of pricing? Maybe. Let's look at the Arab Spring, a series of antigovernment uprisings affecting Arab countries of North Africa and the Middle East beginning in 2010.

          Many theories emanated why such tempest broke out. It is widely believed to have been instigated by dissatisfaction, particularly of youth and unions, with the rule of local governments, though some have speculated that wide gaps in income levels and pressures caused by the Great Recession may have had a hand as well. Other sources confirm the US government's support of the uprisings, funded largely by the National Endowment for Democracy. NED is a U.S. non-profit soft power organization that was founded in 1983 with the stated goal of promoting democracy abroad. It was introduced as a bill in 1967 by Dante Fascell (D-Fla) to create an institute of International Affairs. And although the bill did not pass it led to discussions on Capitol Hill to establish an institution in which democracy efforts abroad would benefit the U.S. as well as countries struggling for freedom and self- government. Rest is history.

          Other analysts pointed to an Al Qaeda strategy for world domination. More issues: Dictatorship or absolute monarchy, human rights violations, political corruption (demonstrated by Wikileaks diplomatic cables), economic decline, unemployment, extreme poverty, and a number of demographic structural factors, such as a large percentage of educated but dissatisfied youth within the entire population. Etc etcetera. All said, I can see a parallel with China's Tiananmen Square protests in 1989. People want reform—not to really close their door (from the West) some more but they want to deal with the world their way and not via Western machinations. Check China out these days. Makes sense, right?

       Arabs are enraged by the fact that their major resource is being exploited yet they don't control its marketing on one side. On the other side, some are angered that oil has become their life which wasn't in the first place. You can still see Arabs on camels sharing parking lots with limos in Dubai and Qatar. Meanwhile, the more we criticize their “backwardness” the more that they get angrier and angrier. A survey in 2014 says that more than half of Americans don't like Saudi Arabia or the Muslim world—which is almost the same percentage of Arabs who hate America. It is sad that extremists resort to wholesale mayhem to deliver that point.

          On a parallel vein but with a contrary evolution is the case in the Philippines. The Filipino people first violently resisted the Spanish and then rose up again when the United States became the new colonial ruler of the Philippines in 1898. President William McKinley declared, “Filipinos are unfit for self-government... There was nothing left for us to do but to take them all, and to educate the Filipinos, and uplift and civilize and Christianize them." Meanwhile, in South Africa, the Zulu people were resorting to violence in an effort to resist British attempts to “civilize” them in the late 1800s. We can of course look back at other transformations in just about any small country in the globe where Western imperialism and mercantilism chose to land.

          Back to what's going on now. Russia is apparently very present in America's current affairs. Amidst SA's threat to lower production (which means, higher gasoline price/s), Russia and other non-OPEC oil-exporting countries like Mexico, Norway and Azerbaijan also say they will lower drillings—but not as much as Saudi Arabia's 1.2 million barrels a day. This is power play of course. Given all these, the fact remains: The US was/is very dependent to Saudi oil. The kingdom is the #2 source of US oil imports at 1.06 million barrels a day or 11 percent. (Canada exports more to the US than any country, some 40 percent; Venezuela ranks 3rd.) Russia is #1 crude oil producer to date.

          Unplanned supply disruptions in the global crude oil market have grown in recent years, peaking at 3.8 million barrels a day in May and September 2015. That is the highest level of supply disruptions since the Iraq-Kuwait War (1990-91) when prices spiked to new high. US production growth has largely offset the loss from unplanned production outages around the world and put downward pressure on prices to the benefit of all consumers. But would America up its output? President Obama did in his first term but he faced a huge battle from pro-environmental lobbyists, which only made more pipelining from Canada logical.

         Meantime, the Senate recently blocked a measure by a wide 71-27 margin that would have prohibited a $1.15 billion arms sale to Saudi Arabia, in a vote that was nonetheless embarrassing to the kingdom. Steady US supply of arms to Saudi Arabia has always be a major entry in the two countries bilateral agreements. By now, Congress may have already overrode a looming presidential veto of a Sept. 11 lawsuit bill the kingdom strongly opposes. Meantime, as political instability in the Middle East persists, the popular view is that increased tensions in the region will reduce oil production.

          It is important that we look at the giant global white board to understand what's going on. The U.S. consumes 20 percent of the world's total oil consumption; second is China at “only” 6 percent. Last year, we consumed a total of 7.08 billion barrels of petroleum products, an average of about 19.4 million barrels per day. And America isn't even the largest or most populous country in the world. Oil is important to us—but oil is located somewhere else. Although the mainland also has its own oil (the US is 3^rd globally in oil production). Yet we need more and more. Sad that Muslim-dominated OPEC countries own those lands. With the entry of Russia and non-OPEC countries into our oil-hungry diet, will the rage stop? I don't know. But things have got to change than simply duplicating the mistakes of past administrations. Diplomacy should be two-sided with the welfare of the people as utmost than the 1 Percent's.
          Anger brought forth 9/11. I don't believe in the other crackpot theory, sorry. Uncle Sam didn't see it coming. Like Deng Xiao Ping didn't see it coming in 1989's Tiananmen Uprising. But China did quench the anger their way and then made itself Great. America will be great again if it changes its foreign policy strategies. No more antiquated protectionism. It's time to negotiate and compromise for common good. Peace is not far-fetched.